Reference no: EM133055061

Question - Crane Inc. operates a retail computer store. To improve its delivery services to customers, the company purchased four new trucks on April 1, 2020. The terms of acquisition for each truck were as follows:

1. Truck #1 had a list price of $27,200 and was acquired for a cash payment of $24,500.

2. Truck #2 had a list price of $25,800 and was acquired for a down payment of $2,200 cash and a non-interest-bearing note with a face amount of $23,600. The note is due April 1, 2021. Crane would normally have to pay interest at a rate of 9% for such a borrowing, and the dealership has an incremental borrowing rate of 8%.

3. Truck #3 had a list price of $26,500. It was acquired in exchange for a computer system that Crane carries in inventory. The computer system cost $15,300 and is normally sold by Crane for $22,900. Crane uses a perpetual inventory system.

4. Truck #4 had a list price of $23,700. It was acquired in exchange for 1,000 common shares of Crane Inc. The common shares trade in an active market valued at $23 per share in the most recent trade.

Required - Prepare the appropriate journal entries for Crane Inc. for the above transactions, assuming that Crane prepares financial statements in accordance with IFRS. For Truck #2, calculate the purchase price using any of the three methods (tables, financial calculator, or Excel).